To: RockyBalboa who wrote (679 ) 11/20/2006 10:20:50 PM From: Glenn Petersen Read Replies (1) | Respond to MSMA has some limits as to price. The FMV of their acquisition target needs to equal at least 80% of the NAV of MSMA at the time of the acquisition. As of September 30, the net assets were $24,801,875. 80% = $19,841,500. If the acquisition goes through, the upfront compensation for the Sprinturf shareholder is 1.5 million shares (valued at $8.04 million) and $8 million in cash, a total of $16.04 million. The contingent compensation has a value of $12.72 million (2 million shares and $10 million in cash). Presumably, they are allowed to use the contingent compensation for the calculation.Fair Market Value of Target BusinessThe initial target business that we acquire must have a fair market value equal to at least 80% of our net assets at the time of such acquisition. The fair market value of such business will be determined by our board of directors based upon standards generally accepted by the financial community, such as actual and potential sales, earnings and cash flow and book value. If our board is not able to independently determine that the target business has a sufficient fair market value, we will obtain an opinion from an unaffiliated, independent investment banking firm which is a member of the National Association of Securities Dealers, Inc. with respect to the satisfaction of such criteria. Since any opinion, if obtained, would merely state that fair market value meets the 80% of net assets threshold, it is not anticipated that copies of such opinion would be distributed to our stockholders, although copies will be provided to stockholders who request it. We will not be required to obtain an opinion from an investment banking firm as to the fair market value if our board of directors independently determines that the target business has sufficient fair market value. sec.gov
